Former Independent Director and former Chairman of the Audit Committee of Yes Bank Agarwal has written a fresh letter to the Reserve Bank of India (RBI) raising various concerns over its capital raising exercise and breach of corporate governance norms.

In the letter dated January 30 to RBI Governor Shaktikanta Das, Agarwal has followed up on the concerns he raised in his earlier letter and has also said that the evaluation of his fit and criteria status was not a part of the agenda circulated on January 9 for the board meeting on January 10.

“This was done intentionally and purposely to divert the attention of regulators, stock exchanges, media and public from factual situation and his own failure on various counts, major being zero progress on capital raising created by Mr Gill in the name of RBI for which I am initiating separate legal proceedings against him,” Agarwal in the letter said.

“Following my earlier letter and resignation, I had sought time from SEBI and RBI. I then met whole time member SEBI who told me to submit in writing. Then on January 30, I submitted my letter to SEBI, RBI, NSE and BSE,” Agarwal told BusinessLine.

BusinessLine has also sent an email query to Yes Bank on the allegations in the letter.

Concerns over fund raising plans

Agarwal has also raised concern over the bank’s capital raising plans and said the Board has been giving selective information to stock exchanges on the fund raising. Knowing that it may be near impossible to raise such a large amount, Agarwal said that the bank has gone ahead and called for an extra-ordinary general meeting for increasing the share capital.

On January 10, the Board of Yes Bank outlined a modified capital raising plan wherein it intends to raise up to ₹10,000 crore through a mixture of equity and debt after deciding not to proceed with the investment proposal of $1.2 billion by Canadian billionaire Erwin Singh Braich and SPGP Holdings.

It has called an EGM on February 7 to increase the authorised share capital and consequently alter the capital clause of the memorandum of association.

Agarwal in his letter also alleged that the lender has appointed Samaya Capital as an advisor for capital raising and paid Rs 18.88 crore. “It is shocking that the lead managers have been given a sum of Rs 2.4 crore… whereas Samaya Capital has been paid nearly Rs 19 crore. For no work, no details or information was ever shared or provided to Capital Raising Committee of Board,” he noted.

He has also alleged that Yes Bank’s Managing Director and CEO Ravneet Gill has gained “undue influence” over the Board of Yes Bank and key managerial personnel and has also questioned second quarter results and provisioning for certain NPA accounts.

Agarwal had, on January 9, also written to the regulators including SEBI and Reserve Bank of India along with the Ministry of Corporate Affairs raising concerns about corporate governance and the recent capital raising plans of Yes Bank. In a regulatory filing, Yes Bank had confirmed the resignation of Agarwal and said his observations on the bank's governance would be examined by the board.

“The bank would like to further intimate that it was reviewing the 'fit and proper' status of Agarwal as directed by the RBI. In this respect, the bank had obtained legal opinions from eminent jurists,” it had said.